Definitions Steven Puryear Fin 370 10-6-2011 Mrs. Watson Definitions 1. Finance- The science of funds management. 2. Efficient Market- A market in which the values of all assets and securities at any instant in time fully reflect all available information‚ which results in the market value and the intrinsic value being the same. 3. Primary Market- A market in which new‚ as opposed to previously issued‚ securities are traded. The primary market provides the channel for sale of new
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Solution to Chapter 8: Budgeting for Planning and Controlling ___________________________________________________________ CHAPTER 8 QUESTIONS FOR WRITING AND DISCUSSION 1. Budgets are the quantitative expressions of plans. Budgets are used to translate the goals and strategies of an organization into operational terms. 2. Control is the process of setting standards‚ receiving feedback on actual performance‚ and taking corrective action whenever actual performance deviates from planned performance
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Chapter 7 Budgeting and Cost Estimation Copyright 2009 John Wiley & Sons‚ Inc. Low Bids If you are bidding on a project‚ do you want your bid to be as low as possible and still make a profit? Accept Low Bid If you are accepting bids on a project‚ do you want to accept the lowest bid? Budgeting A plan for allocating scarce resources to the various endeavors of an organization A budget implies constraints Thus‚ it implies that managers will not get everything they
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Chapter 8 Cost Estimation and Budgeting 8.1 True/False 1) Direct costs are those clearly assigned to the aspect of the project that generated the cost. Answer TRUE 2) Material is an example of a cost that is recurring‚ variable and direct. Answer TRUE 3) An expedited cost is one that does not vary with respect to their usage. Answer FALSE 4) An order of magnitude estimate is usually more accurate than a ballpark estimate. Answer FALSE 5) Comparative estimates are more accurate than definitive
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CH 1 Quiz 1. Suppose your firm invests $100‚000 in a project in Italy. At the time the exchange rate is $1.23= 1.00 Euros. One year later the exchange rate is the same‚ but the Italian government has expropriated your firm’s assets paying only 80‚000 Euros in compensation. This is an example of a. Political risk 2. Country A can produce 10 yards of textiles or 6 pounds of food per unit of input. Compute the opportunity cost of adding one additional unit of food instead of textiles. a. 1 yard
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(01/25/2001) Franco Modigliani and Merton Miller published their famous theory about the optimal balance on debt and equity of the corporate finance. In the Modigliani –Miller theory they stated that the value of the firm is independent of firm’s capital structure. As the portion of debt goes up‚ the firm will be riskier‚ and the expected return will increase. In an efficient market‚ the business risk does not vary with leverage. But later‚ Modigliani –Miller theory modified that taxation should be
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a. Traditional Budgeting Wildavsky (1978‚ p.502) mentions that "traditional budgeting is annual (repeated yearly) and incremental (departing marginally from the year before)". It is conducted on a cash basis in current dollar. It is also in the form of line-items such as personnel or maintenance. This system is essentially a financial plan of estimated expenditures expressed in terms of kinds and quantities of objects to be bought and the estimated funds needed to finance them during a specified
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Unit 4222-365 (DEM 301) Understand the process and experience of dementia Outcome 1.1 The term Dementia Syndrome is a combination of conditions‚ also known as Mixed dementia. Recently autopsies showed that up to 45 percent of people with dementia showed signs of having both Alzheimer’s and vascular disease. Other contributing factors can be motor neurone disease‚ Parkinson’s disease‚ stroke in the brain or a brain disorder. Outcome 1.2‚ 1.3 : Individuals with any type of dementia are
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SOLUTIONS MANUAL CHAPTER 10 BEHAVIORAL FINANCE AND TECHNICAL ANALYSIS Answers to Text Discussion Questions 1. Discuss market bubbles and offer an opinion on why you think investors have trouble spotting bubbles. 10-1. Markets are not always rational and the herd instinct of following the crowds often causes investors and others to ignore the signs that point to a bubble. Bubbles catch professional investors as well as the novice. 2. Describe the three heuristics that investors use
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TEST 2 MGF 301 Corporation Finance Fall 2013 Please sign name in box (Note: Total Points = 100; Multiple Choice = 4 points each unless otherwise indicated) 1. YT Inc. is considering implementing a new project. Which of the following is a cash flow that should be taken into account for capital budgeting purposes? (a) Expected lost sales in a related YT Inc. product caused by the new product (b) The annual bonus paid to the YT Inc. President based on last year’s earnings
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